Monthly Archives: August 2016

The 6 most common regrets after death

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As professional executors, we often have to become involved in very sensitive situations. Our clients trust us with a huge amount of private information, not only financial but also emotional. We are always there to listen, show sympathy and discuss the steps for moving forward.

Over the years we have seen thousands of bereaved clients: we have observed family turmoil, investment concerns and issues relating to property and land, which come up time and again. We see all sorts of regrets from those mourning the passing of loved ones. Here is a list of some of the most common regrets we have observed:

  1. Not registering the family home. We cannot stress enough how problematic it can be if you lose your deeds and cannot prove how the land is held. It is much easier getting these matters sorted before death.
  2. Not making a Will. Intestacy can cause all sorts of problems for families, including delays, unfair distributions, and a concern that the deceased did not leave their estate as they truly wished.
  3. Not updating the Will. It is one thing to omit to make a Will: but what is more, many clients of ours failed to update their Wills after changes in circumstances (divorce, death of a child, change of financial situation). The effect of relying on an old Will in an ever-changing world can be disastrous for those left behind.
  4. Not making amends. We see many “broken families” or instances where contact has been lost between members. Quite often, we have seen clients who regret that they did not do more to reconcile while they still could.
  5. Not taking out insurance. A good policy could cover the funeral, the needs of your partner or wider family, and many eventualities for the probate process which might crop up, such as inheritance tax.
  6. Taking that holiday. Several clients of ours admit that they would rather not receive their inheritance: they would rather their departed loved one had, for example, gone to Turkey after all, had booked that cruise, or had enjoyed their autumn years more. There is more to life, after all, than money.

Sad Cyprus: overseas assets and probate

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Sad Cyprus: overseas assets and probate

It’s summer, and we all have holidays on our minds. More and more of us have properties abroad, often in Europe and even further afield. As luxurious and rewarding as these are, they do of course come with a lot of administrative strings attached.

The first hurdle is whether you can leave your property as you wish. Some countries (for example Germany) have “forced heirship” rules which determine how property is to be divided or inherited. This often applies to “immoveable” assets, that is to say, land; but some countries also apply this concept to money and liquid assets as well. So your Will could try to give your overseas assets to your son, but only in vain hope, because in truth the property needs to pass to your spouse.

The second hurdle is “domicile,” a very important (and very vague) concept. You could be resident in the UK, but a Bahraini domicile. In which case, very different tax rules will apply to your estate. Domicile is largely decided by birth and nationality but is also decided with reference to how long you lived in a certain place, your intentions of returning to your birthplace, where you intend to be buried, and many factors besides.

Another hurdle: even with a sound Will (and an appropriate Will for the overseas country in question) and your executors working effectively in the UK, will they be able to deal with the overseas matters? Some countries have very different practices and courts systems. Pragmatically it can be expensive and exhausting, travelling to and from the country, as may at times be necessary.

We have known some clients become very frustrated with companies and law firms abroad, in estates in Spain, Cyprus, Bahrain, Italy and further afield.

Our advice is to have a separate, local Will for the assets in that country, with local, suitable executors in place that you already know and trust. The UK assets can then be left for us to deal with, giving you peace of mind at home and abroad.

How share certificates will ruin your family’s life

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How share certificates will ruin your family’s life

 

They are perhaps the most popular form of investment we see on a daily basis here at SWW Trust Corporation: and of course, the investment in business capital which could potentially grow in value, and the dividends that they generate, are significant benefits to shareholders.

However, failure to keep your share certificates safe and available to your executors could mean months – potentially years – of frustration, expense and confusion after you have gone.

Buying and selling shares is not always as fast-paced as film and television depictions of YUPPIES would make it seem.

Unless your shareholding is electronically registered so that no certificate is required for transfers or sale, your shares probably need certificates as proof of ownership. When you pass away your executors will need to apply for Probate, and then register themselves as owners in your stead with the relevant share registrars. They will then need to complete the relevant forms for sale, or get the intended beneficiary to co-sign on any transfer forms.

This is a lengthy process at the best of times, regrettably. However, if the share certificates are unavailable, extra steps – and expenses – are required.

Firstly the executors need to let the registrars know. They will then need to buy a countersigned indemnity to protect the registrars for the lost shares. This takes time, and additional administrative expense. Then, replacement certificates need to be issued in the names of the personal representatives. This too, unsurprisingly, takes time and costs money.

Then, the executors need to write back to the registrars with the new certificates and all the forms for transfer or sale, including their Grant, identification for themselves and/or any transferee, and any other required documentation.

It is not a glamorous or swift process. Our best advice: ask your registrars now whether you can do away with certificated ownership, or alternatively, double-check you have a certificate for each and every share you own, and keep them safe and available for your executors for when the time comes.

You will be sparing your loved ones a great deal of wasted time and effort if you do.

It costs HOW much? The Government’s consultation on changing Probate fees

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It costs HOW much? The Government’s consultation on changing Probate fees

A Government proposal was recently floated to change Her Majesty’s Courts and Tribunals Service (HMCTS) fees for Probate. The Ministry of Justice argued that it was a necessary means of raising revenue for the courts, whilst keeping poorer estates away from otherwise costly fees. However, SWW Trust Corporation responded with harsh criticism to the proposals, saying that they were unnecessary, harmful and potentially unlawful.

From 18 February to 1 April this year the Government ran this consultation paper, proposing to reform the fee payable for an application for a Grant of Probate. The proposed fee regime would move from a flat to a banded fee approach, rising with the value of the estate; and would increase the value of the estate below which no fee is payable from £5,000 to £50,000, lifting approximately 30,000 estates out of paying any fee. The proposals were intended, the Ministry claims, to be “fair and progressive.”

Ultimately though the aim was to increase fees for the majority of estates, without an Act of Parliament, potentially to costs of £20,000 for some cases.

“Court fees are never popular,” that Ministry stated, “but they are necessary if we are, as a nation, to live within our means. These proposals would raise around an additional £250 million a year, which is a critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts and tribunals.”

The Trust Corporation responded to the paper with strong criticisms. One concern is that some property-rich, cash-poor estates would have extraordinary difficulty finding thousands of pounds to pay HMCTS just for the Grant application. Secondly there is the concern that the proposals themselves would be unlawful on public law grounds, being either unreasonable, for improper purposes or indeed ultra vires (beyond the powers) of statutory authority.

Underlying it all, though, is the fact that the Government will not be aiming to invest its own funds in the Ministry, which must instead fill its coffers from bereaved individuals who have no alternative but to seek the courts’ assistance in Probate. A captive, unwilling public is being charged a price far greater than the court’s own costs in administering to these applications. It is effectively an indirect, unlawful taxation, seeking to make profit from a public service, from a Government that otherwise boasts of providing relief from inheritance tax for thousands of families.

Whether the proposals will proceed is currently uncertain. There has yet to be a formal response to the consultation exercise. SWW Trust Corporation will monitor the outcome and issue further updates in due course.

Divorce and Will forgery

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It was a forged Will. But the Court denied this man’s claim against it.

 

Divorces are shark-infested waters at the best of times. However, when it comes to the splitting of assets where an inheritance is involved, they can be real bloodbaths.

Matrimonial courts have broad discretion in what they can use as evidence of the wealth available to either divorcing spouse, including past inheritances and trust funds. Although it is unusual to include prospective inheritances, it can happen when the bequest is likely to be considerable and the testator’s death is imminent. In this case, the couple themselves had agreed on what inheritances would be divisible between them.

Mrs Randall had divorced from her husband. In their divorce settlement it had been agreed that if Mrs Corrall, Mrs Randall’s mother, bequeathed to her daughter more than £100,000, anything above that would be split with Mr Randall. Mrs Corrall died in 2013, leaving exactly £100,000 to her daughter, Mrs Randall, and the residue to grandchildren.

Upon death they discovered that Mrs Corrall’s Will gave the estate in the manner described above, leaving nothing whatsoever to Mr Randall. He consequently challenged the validity of the Will, presuming that this division of the estate was simply too perfect in frustrating his expectations. Curiously the High Court, despite agreeing that the facts did indeed indicate that the Will was a forgery, decided to deny Mr Randall’s claim because he had insufficient “standing” to challenge the Will. This was because he was a creditor of his ex-wife, and not of the deceased or a beneficiary. As such the Court said that Mr Randall was not a suitable person to make a claim. He naturally challenged the decision.

The Court of Appeal did indeed grant Mr Randall standing. They accepted that family members and creditors are among those entitled to challenge a Will’s validity, and that it would be a miscarriage of justice for Mrs Randall and the grandchildren (who were the only persons able to revoke the proven Will) could prosper from a suspicious Will simply because the rules of “standing” meant that nobody else could place a legal challenge against it. It was decided that ‘justice in the general sense’ allowed Mr Randall to proceed with his claim. No previous case had ruled decisively on this precise question of standing. Mr Randall, after all, evidently had an interest in the question of the Will’s validity.

So: even those who are not, and never have been, beneficiaries of the Will may challenge its validity. Beware thwarted exes.

“Till death do us part”: divorce and probate claims

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“Till death do us part”: divorce and probate claims

 

Divorce means two major things for probate: it invalidates major Will provisions, and it can heighten the chance of someone making a claim on your estate.

It has never been a more relevant and pressing concern. There has been a significant increase in divorce among older couples, with nearly 10% of those over 65 now having separated from a former spouse. Just to make family life even easier for everyone, this has led to numbers of disputes over inheritance rising commensurately, too, a number of law firms are now reporting.

According to one firm, Hugh James, approximately 490 high-profile inheritance claims were settled in the High Court in 2012. This number rose all the way up to 861 the subsequent year.

The Office for National Statistics states that the proportion of men over 60 who divorce each year went up by nearly 75 per cent from 1993 to 2013.

As the statistical occurrence of infidelity among the older population has increased, and with the number of older people in casual cohabiting relationships nearly rising twofold over the last decade, divorce rates have risen among older people.

Another complicating factor is that in nearly a third of marriages today, either the bride or groom has been married before.

What does this mean for probate?

For one thing, gifts to a former spouse become nullified by divorce. You need to update your Will quickly after divorce to avoid unforeseen havoc.

Also, a divorced spouse may still make a claim under statute law, despite this separation. If, as above, a Will gift to an ex-wife is now invalid, she may be left penniless where she would otherwise have had some support from the testator. She could easily make a claim as a dependant.

If you have divorced or are contemplating this, you must be sure to get the correct advice on your Will, as well.